At December 31, 2020, Net Solutions reported a Cash Sales of $900,000 and Credit Sales of $300,000.
Question:
At December 31, 2020, Net Solutions reported a Cash Sales of $900,000 and Credit Sales of $300,000. Its year-end unadjusted trail balance includes:
1) Allowance for Doubtful Accounts has a $500 debit balance;
2) Accounts Receivable has a $12,000 debit balance.
Required
I) Assuming uncollectible are estimated to be 1.5% of credit sales, for 2020 calculate the Bad Debt Expense and the balance of Allowance for Doubtful Accounts after adjusting;
2) Prepare the year-end adjusting entry for bad debts of 2020 ;
3) On Feb. 10, 2021 P. Moore unexpectedly paid his account in full of $490 which was written off in Nov. 2019. Journalize this transaction.
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy